Cushioning the impact

Published: Thursday, October 3, 2013 at 08:00 AM.

Mike Thomas knew this day was coming.

He was the only Bay County commissioner Tuesday to vote against keeping the county’s impact fees at the same level they have been since 2008. Five years ago, the commission voted to cut in half fees for fire protection, parks and library needs, and to eliminate them on roads.

Just as he did Tuesday, Thomas back then supported the moratorium on roads but opposed cuts to the other impact fees. He cited the loss of revenue and the political difficulty in reinstating the fees in the future.

“This is not going to be an easy thing for any of us to do,” Thomas said in 2008. “To think that we can wait … till times boom again and everybody’s gonna bow and say ‘thank you very much’ is a joke.”

Bay County began charging developers impact fees as a way to offset the cost of expanding infrastructure to accommodate new growth without affecting all residents. Builders are required to pay the fees upfront before securing permits to begin projects, and those costs are passed on to buyers and renters.

When the building boom went bust, though, the county, in response to a request from some local developers, decided to lower or eliminate impact fees to reduce the costs of new construction and, hopefully, make it more attractive to buyers and thus spur growth. The break on fees initially was supposed to last just 18 months — a short-term stimulus.

As Thomas pointed out Tuesday, though, there’s scant evidence the lower fees boosted building permits, even after the cuts were extended several times. On the other hand, since the reduction the county has lost out on $253,405 in fire fees, $315,958 in parks fees and $79,219 in library fees.

He was the only Bay County commissioner Tuesday to vote against keeping the county’s impact fees at the same level they have been since 2008. Five years ago, the commission voted to cut in half fees for fire protection, parks and library needs, and to eliminate them on roads.

Just as he did Tuesday, Thomas back then supported the moratorium on roads but opposed cuts to the other impact fees. He cited the loss of revenue and the political difficulty in reinstating the fees in the future.

“This is not going to be an easy thing for any of us to do,” Thomas said in 2008. “To think that we can wait … till times boom again and everybody’s gonna bow and say ‘thank you very much’ is a joke.”

Bay County began charging developers impact fees as a way to offset the cost of expanding infrastructure to accommodate new growth without affecting all residents. Builders are required to pay the fees upfront before securing permits to begin projects, and those costs are passed on to buyers and renters.

When the building boom went bust, though, the county, in response to a request from some local developers, decided to lower or eliminate impact fees to reduce the costs of new construction and, hopefully, make it more attractive to buyers and thus spur growth. The break on fees initially was supposed to last just 18 months — a short-term stimulus.

As Thomas pointed out Tuesday, though, there’s scant evidence the lower fees boosted building permits, even after the cuts were extended several times. On the other hand, since the reduction the county has lost out on $253,405 in fire fees, $315,958 in parks fees and $79,219 in library fees.

Thomas again was proved prescient about the difficulty in restoring the old impact fees when the commission voted Tuesday to keep the same fee schedule through 2015. Although it’s unlikely the lower fees will contribute much to a building rebound — an improving economy and increased demand will drive most construction decisions — they can’t hurt it, either.

However, the potential drawback to keeping fees low is that the local economy will begin to take off in the next two years and the fees won’t be able to offset the cost of infrastructure. Then it could be passed on to all residents — or force the county to make cuts in spending elsewhere.

The county already is in a financial crunch, living off its reserve fund and its one-time BP settlement money. Its millage rate is the fourth-lowest among Florida’s 67 counties.

In the past, some counties set impact fees excessively high and reaped the revenues they sowed during the supercharged housing bubble. Bay County should set its fees at a rate that simply allows growth to “pay for itself” — nothing less, nothing more.

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